Current Gold Prices Should Be Seen As a Blessing

AppId is over the quota There is a money contraction that the Federal Reserve
believes would be restored with quantitative easing. The problem is that central
banks do not have total control as to how much should be put in along with
guaranteeing it goes where it is most needed. It would mean that the entire
banking system would have to be in complete collaboration to establish that new
money moves towards consumer and small businesses as well as the housing market.
The fact that this has not occurred is against the reasoning of quantitative
easing and with the contraction affecting all but the emerging world, the
movement has to engage all the banks within the developed world, but in its
place they're putting more wood into the fire. It is within the world markets
where the effect can be contemplated. There is an outlook of volatility that has
never existed. The United States and Britain along with the rest of the
developed world were the masters of the market from 1945 until 2010. This
allowed them a high rank globally which permitted them control over the
financial markets world-wide. It's the deprivation of power of the entire
financial world that will produce volatility and insecurity in most markets
going onward. The incompatible goals of the developed versus developing world
are establishing breakdowns that are not anticipated to be mended in the long
run. It now boils down to a fight for control of the world's wealth between
West and East unfolding where the winning side will most likely be the East. The
value of currencies will be governed by the vigor of national economies. In the
past it was a country's Balance of Payments which guided its currency's
exchange rate but it was altered when the U.S. incorporated the price of oil to
the dollar and issued its currency all around the world in spite of unrelenting
trade deficits. The States balanced the Balance of Payments of the US when
demands obligated them to invest anew in the world's leading and most liquid
markets which permitted the number of dollars to grow until it remained as the
only completely liquid and exclusive, reserve currency. It is because of this
that we now have debt-levels that are utterly disproportionate right across the
developed world. The reduction of asset values has not only damaged values, but
it has also affected confidence and faith. If interest rates were to rise
because of this perdition of credence and belief, currencies and
creditworthiness would give way. The only thing quantitative easing does is
delay the beginning of the end. But, wait! Aren't interest rates close to
zero? Shouldn't the developed world markets be soaring? They should be, but
instead they're marking time and have done that for the previous 24 months.
Equity bull markets have the propensity to move forward but no one is interested
or cares much. The center of attention is now on preventing more deflation and
expecting the banking system to stay put. The markets have been reassured by the
Federal Reserve that there'll be no interest rate hikes until 2013. The
markets should be okay until then but what happens afterwards? The sentiment is
not one of future, growth or even hope. But a transformation is on the horizon.
The emergence of Asia has caused a shift towards the East. Asia has weakened the
developed world in a host of manufactured products, intellectual costs, and
generally drawing off a great deal of wealth and growth that is deflating the
developed world. They are growing at a faster pace, developing more, and
outnumbering the developed world and can endure on a tenth of the income of what
the developed world normally need. Even if they augment the legal exchange cost
of their currency relative to others of 20, 30, or even 50% of the Chinese Yuan,
this trend will most likely prolong. What is wrong with the West? They have
become greatly reliant upon whatever determination its markets, banks, and
currencies can meet. It just so happens that the confidence they need was
severely blemished between 2007 and 2011. Because the justifications are so
fundamental, we do not anticipate this confidence to develop anew unless
there's a recovery of growth in the developed world such as their finances
being restored and asset values balanced entirely. Sadly, this would mean an end
of the emerging world, an up and down of power, wealth, and control flowing back
into the developed world. This isn't happening. We need to prepare ourselves
for the worst. Just as Europe and the United States have to confront the callous
essence of unendurable debt levels and a reduction in economic power, the
developed world needs to recognize that there'll be a move to Asian
currencies. Our side of the world will have to acknowledge waning standards of
living and market contractions unless they embrace Asian ones. The process will
continue to be agonizing, but inescapable, as China in particular evolves in
global, economic supremacy. These alterations also signify that the developed
world structures and financial instruments will also lose power, influence, and
value. The anxieties these adjustments will produce can only thrive without
market breakdowns, if the world uses non-national internationally trusted assets
to maintain values as the changes occur. Precious metals will be part of that
story. It's inevitable. Lacking the power of the developed world central
banks, the ability to influence values and prices will no longer exist. We are
certain that China will not permit the United States or Europe to control its
wealth. China also likes gold and is encouraging its citizens to buy it…a lot
of it. As of this moment, precious metals and other financial markets are in
turmoil as much as one would imagine as the world changes. The turmoil is a
blend of asset value contraction and fixed emerging world and central banks
confusion that is not influenced by price. Yet, when the dust settles, look
forward to gold and silver to go with the flow. Notwithstanding the likelihood
of additional descent, it is assumed that the further downside risks do not
merit abandoning the precious metal markets as the upside potential is so
potentially extraordinary. There is a promising future ahead for gold which is
why current gold prices should be seen as a blessing and nothing else. Tags:
Current Gold Price, current gold price news, daily gold price, Gold Prices This
entry was posted on Wednesday, January 25th, 2012 at 3:31 pm and is filed under
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